What are the Labour Party’s proposed changes to employment law?

Now the election is over and the new government is in situ, it’s worthwhile considering the Labour Party’s pre-election proposals to reform employment law. This was set out in a green paper published in January 2024, entitled “A new deal for working people”, and endorsed by Angela Rayner, now the Deputy Prime Minister.

While the paper may be short on detail, there are several key headline proposals – many of which represent radical changes from current employment law. If under the new government, these are implemented and passed into law, employers will then need to make significant changes to current employment practices.

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Employment status

At present, the law distinguishes between three types of employment status – employees, workers, and the self-employed. Labour proposes a single status of “worker” to include workers and employees who’ll be entitled to the same basic rights and protections, including being able to claim unfair dismissal. A separate category for the truly self-employed will remain, and they’ll sit outside these protections.

Statutory sick pay from day one

Under current employment legislation, there are three “waiting days” before SSP is triggered. The general Labour school of thought is that this discourages employees from taking time off when ill, so they’ll be looking to introduce SSP from day one of any period of sickness absence.

Unfair dismissal rights from day one

It’s well known that the qualification period for unfair dismissal rights is two years and is often the very first question an employment consultant will ask when advising a client. Labour will now look to move forward with this, giving the right to claim unfair dismissal from day one. This is one of the most significant proposals from the new government and is likely to affect a business’s decision to take on staff, with more questions being raised by this proposal than there are answers.

Banning zero-hours contracts

Following on from the above, Labour has mooted the idea of banning zero-hours contracts and contracts without a guarantee of a minimum number of hours. Furthermore, anyone working regular hours for 12 weeks or more will have the right to a regular contract. This is designed to protect workers from unpredictable working patterns, who presently may find themselves at a disadvantage if they refuse hours offered. But, of course, many people find that zero-hours contracts and working patterns fit in with their lifestyle, so there will need to be some revisions in this area.

Right to “switch off”

Following the example of France and some other European countries, a further Labour proposal is to introduce a right to disconnect from work and not be contacted by an employer outside of working hours. Within this section, there will also be employee protection from surveillance.

Banning “fire and rehire”

As a last resort to forcing through contractual change, employers currently have the right, in law, to dismiss employees and offer re-employment on the new terms. If new employment law comes to pass – and it’s likely this will be sooner rather than later on the agenda of forthcoming reforms and legislation¬ – the government plans to outlaw this process and strengthen information and consultation procedures instead.

Tribunal claim time limits

The deadline for claiming unfair dismissal is currently three months from the date of dismissal. Proposals under new legislation will ask to extend this claim period, which gives the claimant ample time to prepare themselves in what may be a very stressful situation.

Minimum wage

The Labour government has already made it clear that they’re committed to increasing minimum wages, proposing that rates will be reviewed in line with the cost of living.

In conclusion:

It’s worth noting that despite the overwhelming majority that makes up this government, there are conflicts and differences of opinion within Labour that may lead to some watering down or changes to some of these proposals. 

In a recent speech to the Association of British Insurers, ahead of taking office, the new Chancellor Rachel Reeves said businesses have “nothing to fear,” stating: “There’ll be nothing in Labour legislation that would stop employers from using overtime or taking workers on a seasonal basis to fulfil demand at Christmas or during summer.” 

We’ll be back with an update once we know more about what has actually come to pass with these significant employment law proposals.